Study of Relationships between Carbon Dioxide Emissions and GDP Per Capita Based on Panel Data

This study investigates casual relationship between CO2 emission and gross domestic product per capita in five different country groups, using cross- country data for the period 1960-2007. To achieve the purpose, the co- integration test and error correction models are applied. Results confirm casual relationships between the two variables. A unilateral relationship between GDP and CO2 emission was founded for countries with low and upper middle income and a bilateral relationship for countries with lower middle income and OECDs nations. Using world data, the relationship between GDP and CO2 emission was found bilateral. Furthermore, estimation of long term relationship between CO2 and GDP indicates that all countries are placed at the point ASC of the Kuznets curve. This indicates that for all countries increase of income raise CO2 emission in average. However, the slope of this curve was found increasing for high level income countries and decreasing for low level income countries.